Realindex Australian Share Fund

Fact sheet - 31 Aug 2015

Fund strategy Fund facts The Realindex Australian Share Fund uses the RAFI® methodology in the Benchmark S&P / ASX 200 Accumulation Index construction of its portfolios which selects and weights companies Funds under management $2800.1 million according to their economic footprint defined by fundamental measures of Inception Date 17 November 2008 company size (sales, cash flow, book value and dividends). The portfolio is further enhanced by applying additional factors such as quality of earnings and debt coverage.

Commentary The Realindex Australian Shares Fund returned -7.39% (gross of fees) during August 2015 outperforming the S&P/ASX 200 Accumulation Index which returned -7.79% (its worst monthly performance since October 2008).

Value (-7.3%) slightly outperformed Growth (-8.0%) during the month, extending the longer-term outperformance trend (-2.4% vs. -6.1%, 12 months to 31 August 2015). This outcome is typically favourable for portfolio performance, given the Value tilt inherent in the Fundamental Indexation methodology.

The Materials sector (-5.2%) was the top contributor to relative performance during the month, driven by overweight holdings in steel companies (+21.4%) and BlueScope Steel (+18.7%). Sims reported a better-than-expected FY15 result, while BlueScope committed to $200m cost out by FY17, which was well received by investors.

An overweight holding in Spark (+13.0%) led the portfolio’s outperformance in the Telecommunications sector (-8.3%). Spark rallied after announcing positive earnings growth and an annual dividend increase at its FY15 results. Spark was the top contributor to relative performance across the portfolio at a company level.

In the Consumer Staples sector (-4.1%), an overweight holding in (-1.6%) drove outperformance. Wesfarmers, which owns the Coles chain of supermarkets, performed well after delivering a solid set of FY15 results. Underweight exposure to a relatively strong Health Care sector (- 5.8%) was the main detractor at a sector level. Biotechnology company Medical (+12.5%), which is not held in the portfolio, rallied after posting record sales and net profit.

The portfolio has an underweight exposure to ’s Financials sector (-9.6%), and thus benefitted from weakness in the ‘big four’ banks; (-11.4%), ANZ ( 14.5%), NAB (-14.5%) and (-10.8%). These gains were largely offset however by underweight holdings elsewhere in the sector, with Private (+11.5%), ( 1.2%) and Magellan Financial Group (+5.3%) all faring significantly better.

The portfolio continued to offer a valuation discount to the market-cap benchmark, as measured by price-to-book (2.1x vs. 2.3x) and price to sales (2.1x vs. 2.6x), as well as a dividend yield higher than the benchmark (5.0% vs. 4.8%).

% figures in parenthesis show total return in Australian dollars from 31 July 2015 to 31 August 2015, unless otherwise noted.

Since Gross performance 1 month 3 month 6 month 1 year 2 year 3 year 5 year inception Realindex Australian Share Fund -7.39% -9.64% -10.49% -4.49% 4.60% 11.37% 8.80% 11.23% ASX 200 Accum -7.79% -8.84% -10.09% -3.16% 5.26% 11.25% 8.16% 10.17% Outperformance 0.40% -0.80% -0.40% -1.33% -0.66% 0.12% 0.64% 1.06%

Top 10 holding comparison ASX 200 ASX 200 as at 31 Aug 2015 Fund Accum Active Weight Sector Holding comparison Fund Accum Active Weight BHP Billiton Limited 7.45% 6.07% 1.39% Energy 5.31% 4.48% 0.83% Commonwealth Bank of Australia 7.20% 9.57% -2.37% Materials 18.09% 14.45% 3.63% Westpac Banking Corporation 6.79% 7.43% -0.65% Industrial 8.63% 7.48% 1.15% Corporation Limited 5.41% 5.29% 0.12% Consumer Discretionary 5.59% 4.26% 1.33% Limited 4.99% 6.12% -1.13% Consumer Staples 9.61% 6.99% 2.62% Wesfarmers Limited 4.50% 3.43% 1.07% Healthcare 3.72% 6.45% -2.73% Woolworths Ltd 3.33% 2.51% 0.82% A-REIT 5.82% 7.46% -1.63% Limited 2.05% 1.60% 0.44% Financial-x-A-REIT 33.93% 39.70% -5.77% Ltd 1.88% 1.72% 0.16% Information Technology 0.45% 0.68% -0.23% CSL Limited 1.59% 3.21% -1.62% Telecoms 6.56% 5.76% 0.80% Utilities 2.30% 2.30% 0.00%

Top 5 relative contributors Value added Top 5 relative detractors Value lost Limited 0.09% Medibank Private Ltd -0.06% Commonwealth Bank of Australia 0.09% Scentre Group -0.04% Leighton Holdings Limited 0.07% Group Ltd. -0.04% Wesfarmers Limited 0.07% Airport -0.04% Sims Metal Management Limited 0.06% Downer EDI Limited -0.03%

Contact To find out more, please contact us on 1300 809 204 or email [email protected]. Disclaimer Realindex Investments Pty Limited ABN 24 133 312 017 AFSL 335381. The Realindex Australian Share Fundoption (Fund) described in this document is offered by Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232 468. This document is intended to provide general information only. You should assess whether the information is appropriate to you before making an investment decision. The performance figures used in this document are sourced from the Fund’s relevant benchmark index and from actual performance figures achieved before fees and expenses. Past performance is no indication of likely future performance. The fees payable by investors in the Fund may be negotiated and can differ between investors. For this reason the performance figures used in this document are shown before fees and costs. Investors should have regard to the Information Memorandum (available by contacting the Realindex team on 1300 809 204) or their negotiated fee agreement for further information on the fees and costs. Neither the Commonwealth Bank of Australia nor any of its subsidiaries guarantees or stands behind the performance of the Fund or the repayment of capital. An investment in the Fund is not a deposit or liability of the Bank and is subject to investment risk including loss of income and capital. RAFI and Fundamental Index are trademarks of Research Affiliates LLC, and are used with permission. Patent pending: WO 2005/076812, WO 2007/078399. Research Affiliates, LLC, is a U.S. Securities and Exchange Commission registered investment advisor. Research Affiliates, LLC and its related entities do not warrant the accuracy of the information provided herein, either expressed or implied, for any particular purpose.

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